PRODUCTS PLANNING AND PROCESS
SELECTION
Prepared by Şevkinaz Gümüşoğlu
using different references about POM
Planning new products and geting them to market
quickly is the challenge facing manufacturers in
industries .
 In our changing world today customers demand that
a company’s offerings be individualized to meet
particular meets, situations and lifestyles.
 They want product and services of superior quality
available promptly. The firms requirements are
innovation, flexibility, improvement, new practical
competencies, design and redesign ways. They must
orientate themselves to their customers in a new
way.
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Management must developed and meet the customer’s need
by using the available resources and the technological
capabilities of the organization.
New-product design is crucial to the survival of most firms.
While a few firms experience little product change, most
firms must continually revise their products. In fastchanging industries, new-product introduction is a way of life
and highly sophisticated approaches have been developed to
introduce new product.
Product design is seldom the responsibility of operations
functions but operations is greatly affected by new-product
introduction. Operations is on the “receiving end” of new5-3
product introduction. At the some time, new products are
constrained by existing operations and technology.
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Therefore, it is extremely important to understand the
new product design process and its interactions with
operations. Product decisions affect each of the decision
making areas of operations. Therefore they should be
closely coordinated with operations to ensure the operation
is integrated with prod. Design.
There are three strategies for new-product
introduction process:
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Market-driven: According to this view, “You should make what you can
sell” In this case, new products are determined by the market with little
regard to existing technology and operations process. Customer needs are
the primary basis for new-product introduction. Customer want products
and services of superior quality available promptly. The requirements are
for innovation, flexibility, quality based on active listening to customer
so as to determine their concerns. Being prepared to deliver on such
requirements will require companies to cultivate new practical
competencies, to redesign the ways they do their work through business
processes and to orient themselves to their customers in a new way.
Technology-driven: This approach would suggest that “ You should sell
what you can make” Accordingly, new products should be derived from
production technology. This view is dominated by vigorous use of
technology and simplicity of operations changes.
Interfunctional view: New-product introduction is interfunctional in
nature and requires cooperation among marketing, operations,
engineering and other functions Using this approach the new-product
design will fall some where between “making what you can sell” and
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“selling what you can make”, as shown in figure
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
The top manager of miraculously successful Sony is
saying; “ Our plan is to lead the public to new product
rather than ask them what they want. The public does
not know what is possible but we do.” No customer
expressed a need for a Walkman sound system, but
soon after Sony invented it, every one had to have
music with them wherever they most. A similar
example is air condition.
All enterprises today must use quick-connect electronic
interfaces to coordinate product creation resource
chains (CAD). Chrysler reduced its product
development cycle from over 60 months to 36 month or
less in the late 1980 s. Nowaday this cycle is about 1218 month in the automotıve industry.
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Chrysler old chairman Le Iacocca as declaring “We got
to do cars differently. We got to do modular stuff.”
These approaches is required;New Product idea
 Product Design
 Rapid Prototyping
 Rapid Tooling
 Usuability
 Production Design
 Industrial Design Firms
 Prototyping companies
 Standard Communication interfaces, Design Files of
CAD software for Product Creation.
 Manufacturing companies supported CAM software
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to produce designed files of CAD

Copyright 2006 John Wiley & Sons, Inc.
MAJOR FUNCTIONS OF PRODUCT PLANNING
 Desingning
for the customer; ind. design
 Reducing Time-to-Market;speed
 Improving Quality of Design;QFD
 Product Development:generating new pro.ideas
 Desing Process;linking desing and manufacturing,
design for manufacturability, process selection
 Special Considerations in Service Design
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FORM AND FUNCTIONAL DESIGN
Form Design
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how product will look?
Functional Design
reliability
 maintainability
 usability
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Copyright 2006 John Wiley & Sons, Inc.
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RAPID PROTOTYPING
Build a prototype
form design
 functional design
 production design

Test prototype
 Revise design
 Retest
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Copyright 2006 John Wiley & Sons, Inc.
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USABILITY
Ease of use of a product or service
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ease of learning
ease of use
ease of remembering how to use
frequency and severity of errors
user satisfaction with experience
Copyright 2006 John Wiley & Sons, Inc.
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PRODUCTION DESIGN
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Copyright 2006 John Wiley & Sons, Inc.
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Simplification
 reducing number of parts, assemblies, or
options in a product
Standardization
 using commonly available and interchangeable
parts
Modularity
 combining standardized building blocks, or
modules, to create unique finished products
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Design Simplification
(a) Original design
(c) Final design
One-piece base &
elimination of
fasteners
Design for
push-and-snap
assembly
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(b) Revised design
Assembly using
common fasteners
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MEASURE DESIGN QUALITY
Copyright 2006 John Wiley & Sons, Inc.
% of revenue from new  % of parts that can be
products or services
recycled
 % of products capturing  % of parts used in
50% or more of market
multiple products
 % of process initiatives
 % of parts with no
yielding a 50% or more
engineering change orders
improvement in
 Average number of
effectiveness
components per product
 % of suppliers engaged in  Things gone wrong (TGW)
collaborative design
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QUALITY FUNCTION DEPLOYMENT (QFD)
 Translates
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
first matrix called “house of quality”
series of connected houses
Copyright 2006 John Wiley & Sons, Inc.
voice of customer into technical
design requirements
 Displays requirements in matrix diagrams
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A SERIES OF CONNECTED
QFD HOUSES
Process
characteristics
A-2
Parts
deployment
Operations
A-3
Process
planning
Process
characteristics
House
of
quality
Part
characteristics
A-1
Product
characteristics
Customer
requirements
Part
characteristics
Copyright 2006 John Wiley & Sons, Inc.
Product
characteristics
A-4
Operating 5-16
requirements
5
Trade-off matrix
3
Design
characteristics
1
4
2
Customer
requirements
Relationship
matrix
Competitive
assessment
6
Copyright 2006 John Wiley & Sons, Inc.
Importance
HOUSE OF QUALITY
Target values
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COMPLETED
HOUSE OF QUALITY
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SS = Silverstone
MG = Mirorrglide
T = Titanium
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BENEFITS OF QFD
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Copyright 2006 John Wiley & Sons, Inc.
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Promotes better understanding of customer
demands
Promotes better understanding of design
interactions
Involves manufacturing in design process
Breaks down barriers between functions and
departments
Provides documentation of design process
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Product Selection
Product selection are influenced by;
 1.The firm’s resource and technology base
 2.The market environment
 3.The firm’s motivation to use capabilities to meet the need of the
market place.
Copyright 2006 John Wiley & Sons, Inc.
Product is the structuring of competent parts or activities so that as a
unit they can provide a specified value. Product specification is typically
an engineering function. In service industries requirement. Design,
production an marketing costs are reduced by standardizing and
simplifying the product. After prototype units one designed and
produced, the products are further analyzed and tested to see how well
the quality, performance and costs conform to the design objectives.
Simplification may take place to reduce unnecessary variety in the
product line by discussing the number and variety of product produced.
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Product-Mix Decision
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Within the product-line grouping, decision must be made to select which mix of
products to in view of costs, capacity and other limitation.
Linear programming is a useful technique for assisting in product-mix decisions.
It applies to situations where there firm has a demand for whatever quantity of
two or more products it can produce. Another typical application is for the
selection of the least costly mix of raw materials .
Linear Programming

LP is a mathematical technique for maximizing or minimizing a linear objective
function, subject to linear constraints. It has wide variety of applications. It
assumes that

cost and revenue values are known (certainty)
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profits from various activities are additive (additivity)
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it doesn’t allow negative production values (non-negativity)
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It has widespread application such as capital budgeting, line balancing, planning
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and scheduling.
1-Graphical solution method:
For the simple linear problems, the easiest procedure is the graphical method.
Example1. A chemical firm produces automobile cleaner X and polisher Y and realizes $10
profit on each box of X and $30 on Y. Both products require processing through the same
machines A and B, but X requires 4 hours in A 8 in B, where as Y requires 6 hours in A
and 4 in B. During the forthcoming week machines A and B have 12 and 16 hours of
available capacity, respectively Assuming that demands exists for both products, how
many boxes of each should be produces to realize the optimal profit P?
.
First step: Formulate the problem in ten of linear objective function and linear const.
X: No.of cleaner X to be produced.
Y: No. of polisher Y to be produced.
Objective function is:
Maximize
P = $10 x + $30y
The constraints are:
4x + 6y  12
8x + 4y  16
Also
x and y  0
in two dimensions.
We begin by constructing a graph that represents the LP
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Second step: Variables are X and Y. The constraint.
Are plotted as equalities. We use a ruler to make a heavy horizontal
line for the X axis and a heavy vertical line for the Y axis.
To graph:
A:
if x=0 y=2
if y=0 x=3
B:
ifx=0 y=4
ify=0 x=2
Note that the graph established a feasible region bounded by the
explicit capacity const of A and B and the implicit constraints that
production of x>0 and production y>0
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Third step: The slope of the objective function.
P =10x+30y
The standard slop intercept form of a linear equation is
Y= mX + b
where m is the slope of the line 8that is, change in Y pen unit change in x) and b is
there Y intercept.
Expressing our objectives in this form , we have.
30 y = -10x +P
Y= (-1/3) x + P/30
The slope = -1/3; that is, the line decreases one unit in Y for every three positive units
of X. This is plotted at any convenient spot within the feasible solution region. We
could plot a similar line for any other value of Z. These profit lines are parallel.
Fourth step: The slope of the objective function is moved away from the origin until
restrained by the furthermost intersection of A and the implicit constraint x>0. The
optimal solution will always be at a corner in the feasible region. This corner will
be
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the last point in the feasible solution region
Fifth step: The arrow point to the solution, within is determined by the x and y
coordinates at time co.
In this example x=0 y=2 P = $10 (0) + $30(2) = $60
4(0)+6(2) 12
12=12
8(0)+4(2) l6
816
In this example the firm should produce no cleaner and two boxes of polisher for a
profit $60.
We can see from the graph, the constraint imposed by machine B (8x+4y <16) has
no effect, for it is the 12 hours of machine A (4x+6y<12) that are constraining
production of the more profitable polisher.
The graph also reveals that profit would continue to increase if more hours could
be made available on machine A up to the point of doubling output (to x=0 end
y=4)
At this point, the time available from machine B would become constraining
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GRAPHICAL SOLUTION METHOD EXAMPLE

The management wants to utilize the unused capacities
by producing two new products.
 Product-1: An 8 foot glass door with aliminum framing
 Product-2: A 4x6 double hung window with woodframing
Copyright 2006 John Wiley & Sons, Inc.
A company is already producing some products.
However there are some idle capacities of the facilities.
There are three plants. The idle capacities in terms of
labor hours per week are as follows
Plant
Idle Capacity(hours/week)
Plant -1
4
Plant -2
12
Plant -3
18
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
The products are produced in batches
Plant-1 produces aliminum frames
 Plant-2 produces wood frames
 Plant-3 produces glass and assembles the
products
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Production Time per Batch
(hours)
Plant
Product -1
Product-2
Plant -1
1
0
Plant-2
0
2
Plant-3
3
2
Copyright 2006 John Wiley & Sons, Inc.
The unit profits per products are 3000 and
5000 respectively.
 The labor hours required to produce
different parts of the products at different
plants are as follows :
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Objective (Goal)
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To maximize total profit
Decision Variables
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We have to decide on amounts of products to be
produced.
x1 : the number of Product-1 to be produced
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What do we have to decide on?
 What are the variables that we can control ?

x 2 : the number of Product - 2 to be produced
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Constraints
Resources are limited
4 hours available at Plant -1
2x2  12
12 hours available at Plant -2
3x1  2x 2  18
18 hours available at Plant-3
x1  0, x 2  0
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x1  4
Objective Function
Z  3 x1  5 x 2
Total profit to be maximized
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x2
GRAPHICAL
SOLUTION
Solution space for x1  0 and x 2  0
x1
x2
x1  4
4
x1
x2
2 x2  12
6
4
x1
x2
6
3x1  2 x2  18
4
x1
x2
Z  3x1  5x2  10
6
4
x1
x2
Z  3x1  5x2  10
Z  3x1  5x2  20
6
4
x1
x2
6
Z  3x1  5x2  30
4
x1
x2
6
Z  3x1  5x2  36
4
x1
EXAMPLE


(a) Formulate a linear programming model for this
problem.
(b) Use the graphical method to solve this model.
Copyright 2006 John Wiley & Sons, Inc.
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The Primo Insurance Company is introducing two new
product lines: special risk insurance and mortgages. The
expected profit is $5 per unit on special risk insurance and
$2 per unit on mortgages. Management wishes to establish
sales quotas for the new product lines to maximize total
expected profit. The work requirements are as follows:
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X1= no. of special risk insurance
 X2= no. of mortgage.
 ZMax = 5X1+2X2
s.t. 3X1+2X2<=2400
X2<=800
2X1<=1200
X1,X2>=0

Copyright 2006 John Wiley & Sons, Inc.
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Copyright 2006 John Wiley & Sons, Inc.
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